In 1861, the money in
circulation in the United States consisted of gold and silver coins,
and state bank currency. As the expenses of the Government in 1861-62 were many
millions of dollars in excess of its income, and as but little money could be
had by the sale of its bonds, recourse was had to issuing paper money.

By the acts of July 17th,
and August 8, 1861, the Secretary of the Treasury was authorized to issue
demand notes to the amount of fifty millions of dollars, and these notes were
made full legal tender for all debts and demands, both public and private. This
was net the first time that the Federal Government had issued its notes to
circulate as money. It will be remembered that during the war of 1812, the
Government had resorted to this means, a precedent followed by the
administrations of Van Buren, Polk, and Buchanan.

These notes so issued at
these various times were maintained at a parity with
gold and silver coin, and were a favorite money of the people. History records
the fact that no less than twenty issues of paper money were emitted by the
general Government prior to the year 1862; that the people never questioned its
value and efficiency as a medium of exchange. These various issues of currency
were uniformly receivable by the government in payment of its taxes and
revenues.

During the perilous times
of the nation, when bankers and financiers refused to loan money to it, the
issue of full legal tender paper money never failed to come to the rescue,
while cowardly gold fled to the rear.

Therefore, the fifty
millions of demand notes issued under the authority of the acts of July 17th
and August 5, 1861, having unlimited legal tender power for the payment
of all demands, never depreciated a farthing.

Subsequent to the passage
of this act, a bill was introduced in Congress providing for the issue of
non-interest bearing treasury notes to the amount of $150,000,000 with full
legal tender power for the payment of all debts and demands, public and
private. Immediately, from the leading cities of the country, a horde of
bankers, or as Hon. Thaddeus Stevens aptly termed them, "A delegation of
bankers and coin venders," hastened to Washington, organized themselves,
and requested the Committee on Ways and Means of the House, and the Finance
Committee of the Senate to meet with them at the office of the Secretary of the
Treasury. Their request was complied with on the 11th day of February, 1862.

Owing to some peculiar and
powerful influence, then and there exerted by these organized bankers on these
committees, the legal tender clause was modified to read as follows:

"That
the amount of the two kinds of notes together shall at no time exceed the sum
of $150,000,000, and such notes herein authorized shall be receivable in
payment of taxes, internal duties, excises, debts, and demand of every kind due
to the United States, except duties on imports, and of
all claims and demands against the United States of every kind whatsoever, except
for interest upon bonds and notes which shall be paid in coin, and shall also
be lawful money and a legal tender in the payment of all debts, public and
private, within the United States, except duties on imports and
interest as aforesaid."

This proposed amendment was
severely criticized by Mr. Stevens, of Pennsylvania, and by Mr. Spaulding, of New York. During the debate upon the bill as
amended, Stevens denounced the demands of the bankers and said:

"A
doleful sound came up from the caverns of the bullion brokers and the saloons
of the associated banks. Their cashiers and agents were soon on the ground, and
persuaded the Senate with but little deliberation to mangle and destroy what it
had cost the House months to digest, consider and pass.

"Instead
of being a beneficent and invigorating measure, it is now positively
mischievous. It has all the bad qualities which its enemies charged on the
original bill and none of its benefits. It now creates money and by its very
terms declares it a depreciated currency. It makes two classes of money - one
for banks and brokers and another for the people. It discriminates between the
rights of different classes of creditors; allowing the rich capitalist to
demand gold and compelling the ordinary lender of money on individual security
to receive notes which the Government had purposely discredited."

Mr. Stevens further said:

"Who
is this favored class? The bankers and brokers and nobody
else. But how is this gold to be raised? The duties and public lands are
to be paid for in United States notes, and they or bonds are to be
put up at auction, to get coin for these very brokers, who would furnish the
coin to pay themselves by getting twenty per cent discount on the notes thus
bought."

While on his death bed, the
Great Commoner, as his friends loved to call him, recalled the action of
Congress in demonetizing the greenback at the instigation of the banks. In
speaking of the bankers he said:

"We
were foolish to grant them gold interest, and now they unblushingly demand
further advantages. The truth is we can never satisfy their appetite for
money."

The amendment of Mr.
Stevens to place officers and soldiers of the army and navy, and those who
should furnish them with provisions upon the same standing as the bankers and
brokers, was defeated by a vote of 72 to 67.

In denouncing the amendment
striking out the legal tender clause, Senator John Sherman spoke as follows;

"If
you strike out this legal tender clause you do it with the knowledge that these
notes will fall dead upon the money market of the world; that they will be
refused by the banks; that they will be a disgraced currency that will not pass
from hand to hand; that they will have no legal sanction; that any man may
decline to receive them, and thus discredit the obligations of the Government.
I ask again if that is just to the men to whom you have contracted to pay
debts? When yon issue demand notes and announce your purpose not to pay any
more gold and silver coin, you tender to these who have
furnished provisions and services this paper money. What can they do?
They can not pay their debts with it, they can not
support their families with it, without a depreciation."

He further said in this
speech of February 13, 1862, that

"I
much prefer the credit of the United States, based as it is upon all the
productions and property of 50 the United States, to the issues of any corporation,
however guarded and managed."

This language of Senator
Sherman was that of undoubted patriotism, and it is strongly condemnatory of
his subsequent public career, during which he became the active ally of the
national banks.

Mr. Kellogg, of Illinois, thus scored the greed of these
men. He said:

"I
am pained to sit in my place in the House and hear members talk about 'the
sacredness of capital, that the interests of money must not be touched. Yes,
sir, they will vote six hundred thousand of the flower
of the American youth for the army to be sacrificed without a blush, but the
great interests of capital, of currency, must not be touched. "

In referring to the grand
struggle made by Mr. Stevens for full legal tender currency, Judge Kelley said:

"I
remember the grand old Commoner with his hat in his hand and his cane under his
arm, when he returned to the House from the final conference, shedding bitter
tears over the result 'Yes, said he, we have had to yield. The Senate was
stubborn. We did not yield until we found that the country must be lost or the
banks be gratified; and we have sought to save the country in spite of the
cupidity of its wealthiest citizens."

The bankers thus succeeded
in limiting the legal tender power of the Treasury note, or as it is commonly
called, the greenback, and from this time on the bankers, brokers, and
speculators have, with few exceptions, dictated the financial legislation in
the United States.

This amendment, by which
the debt paying power of the Treasury note was restricted within such narrow
limits, was a most dishonest act on the part of the government.

It drew distinctions
between the various kinds of money issued by the United States. It made the bankers and bond
holders a privileged class, and it inflicted a wound upon the nation from which
it has not yet recovered. It made gold and silver coin the money of the
privileged classes, who composed that traitorous element so justly denounced by
Jefferson.

By force of this amendment,
coin went to a premium, thereby greatly enhancing the wealth of the bankers and
bullion brokers.

Moreover, the principle
involved in that act greatly weakened the most powerful element of sovereignty
that can reside in a nation, by placing the control of the value of money in
the hands of organized greed, in this case the gold gamblers of Wall street.

It laid the foundation of a
stupendous public debt, which the holders thereof would strive to perpetuate by
every means in their power, and it was the first step to fasten on the people
the most powerful and merciless tyranny that ever cursed a free people - the
centralized money power known as the national banking system.

The bill, as amended,
became a law on July 11, 1862, and, from that time, began the
depreciation of the greenback currency.

The banking power, which
had succeeded in inducing Congress and the President to cripple that currency,
which eventually saved the Union, afterward pointed the finger of scorn at this
money as a debased currency, and they, therefore, impliedly damned their own
nefarious conduct by denouncing it as "rag-baby" money.

As a result of this act as
amended, the merchant who paid duties on merchandise imported from abroad was
compelled to pay the taxes levied thereon, in coin. To obtain that kind of
money he must proceed to the bullion broker, and pay him a large premium for
the coin to mate his payment of the customs levied on his merchandise. The bond
holder was paid his interest on government bonds in gold, which was afterward
sold by him to the importer, at a high premium.

This legislation was the
result toward which the bullion brokers and gold gamblers of Wall Street bent
all their energies to procure, when they induced the government to rob the
greenback of its full legal tender debt-paying power. It was the consummation
of the most dishonest financial scheme ever perpetrated upon a heavily taxed
and patriotic people.

Immediately following the
visit of these bankers to Washington, a circular was issued by the London bankers, and distributed by one
Hazard, who was their representative in this country at that time.

The contents of this famous
circular are as follows:

"Slavery
is likely to be abolished by the war power and chattel slavery destroyed. This
I and my European friends are in favor of; for slavery is but the owning of
labor and carries with it the care of the laborer, while the European plan, led
on by England, is capital control of labor by controlling wages. This canbe done by controlling
the money. The debt, that capitalists will see is to
be made out of the war, must be used as a measure to control the volume of
money. To accomplish this the bonds must be used as a
banking basis. We are now waiting for the Secretary of the Treasury to make his
recommendation to Congress. It will not do to allow the greenback (as it is
called) to circulate as money any length of time, for we cannot control
it."

The existence of this
remarkable circular has been strenuously denied time and again by the national
banking money power. Notwithstanding these denials, the line of action
indicated in that circular has been consistently pursued from that day to this.

The advice of said Hazard
was at once acted upon by the organized banks, and they proceeded to mate known
their demands to Congress.

Therefore, a bill was
speedily brought forward by Senator Sherman in the United States Senate,
providing for the incorporation and organization of the present system of
national banks as banks of issue - a bill whose passage meant the creation of
moneyed institutions, whose interests would be, or could be made, antagonistic
to the nation.

Is it not exceedingly
strange, that Senator Sherman, who, in his able speech of February 13, 1862,
advanced powerful arguments in behalf of Government legal tender currency, or
greenbacks, in which he stated that he preferred the credit of the United
States, based, as it was, upon all the productions and property of the people,
to the issue of any corporation however well guarded and managed, would thus
suddenly change his position?

In less than a year from
the time he so ably defended legal tender greenback currency; he reversed his
position, and fathered a financial measure which brought into being a dangerous
rival to the Government when it was engaged in a death struggle.

In substance, this act
provided for the incorporation of banking companies, by which not less than
five persons could, under certain restrictions, organize a bank, by depositing
with the Secretary of the Treasury

United States bonds to secure the circulation of
national bank notes as currency.

The capitalists thus
organizing themselves into a national bank association were required to enter
into articles of association which should specify, in general terms, the object
for which the association was formed.

These articles were to be
signed by the persons uniting to form the association, and a copy of them was
to be forwarded to the Comptroller of the Currency to be filed and preserved in
his office.

No association could be
organized as a national bank with a less capital than one hundred thousand
dollars; except that banks with a capital of not less than fifty thousand
dollars could, with the approval of the Secretary of the Treasury, be organized
in any place having a population not exceeding six thousand inhabitants.

Upon a deposit of United
States bonds, the banking associations were entitled to receive from the
Comptroller of the Currency, circulating notes, of different denominations, in
blank, registered or countersigned, equal in amount to ninety per centum of the
amount of the current market value of the bonds so deposited by the association
with the Comptroller, but in any case the circulating notes were not to exceed
ninety per centum of the par value of the said bonds, if bearing interest at a
rate of not less than five per cent per annum; and the amount of circulating
notes to be furnished to each association shall be in proportion to its paid-up
capital as follows, and no more:

To each association whose
capital does not exceed five hundred thousand dollars, ninety per centum of
such capital.

To each association whose
capital exceeds five hundred thousand, but not exceed one million of dollars,
eighty per centum of such capital.

To each association whose
capital exceeds one million of dollars, but not exceed three millions of
dollars, seventy-five per centum of such capital.

To each association whose
capital exceeds three millions of dollars, sixty per centum of such capital.

The law further provided
that after any association receiving circulating notes under this act, and has
caused its promise to pay such notes on demand to be signed by the president,
or vice-president, and cashier thereof in such manner as to make them
obligatory promissory notes payable on demand, at its place of business, such
association may issue and circulate the same as money. And such notes shall bc received at par in all parts of the United States in
payment of taxes, excises, public lands, and all other dues to the United
States, except duties on imports, and also for all salaries and other debts and
demands owing by the United States to individuals, corporations, and
associations within the United States, except interest on the public debt, and
in redemption of the national currency.

This act also provided
that, in lieu of all existing taxes, each association should pay a duty of one
per cent per annum upon the average amount of its notes in circulation, and
one-half of one per cent per annum upon the average amount of its deposits, and
a duty of one-half of one per cent per annum on the average amount of its
capital stock beyond the amount invested in United States bonds.

Furthermore, these national
banking associations were authorized to institute suits at law in the United States courts as courts of original
jurisdiction.

This provision gave the
national banks an advantage over the ordinary citizen, and placed these
associations beyond the jurisdiction of the State courts; in other words, these
banks could select whatever court their interest dictated.

It will at once be
ascertained, from a study of the national banking law, that the capital of the
associations was nearly doubled by act of Congress.

In the first place, bonds,
deposited by them to secure their circulation drew interest payable in gold, at
this time at a high premium. Second, the circulating notes issued to them by
the United States, although promissory notes payable
on demand and therefore debts of the banks, were nominally money, and were
loaned out at a high rate of interest to the customers of the national banks.

The United States
Government gave the wealthiest men of the country, in the time of its greatest
peril and distress, a gratuity equal to ninety per centum of their banking
capital.

This scheme engineered
through Congress by the money power, greatly tended to centralize the currency
in the large cities, and, therefore, made it master of the productive energies
of the American people, as the vast majority of the bonds were held in New York City and other centers of wealth and
population.

It made the circulating notes
of these banks a rival to the greenback currency, and it would bc to the interest of the national
bankers, by every means in their power, to drive out and destroy the paper
money issued by the Government.

This law
placed it in the hands of the money power to contract or expand the volume of
money at its pleasure, and, therefore, enhance or depreciate the value of stocks,
bonds, and all other forms of property in the United States.

The far-reaching influence
of this act of Congress, chartering national banks, becomes apparent, when the
true principles and functions of Government are considered in all their
relations to the people.

Pre-eminent among the
various powers conferred upon, or assumed by a sovereign state, are those of
taxation, of raising armies, and of coining, issuing, and controlling the
volume of money.

The first named power, that of taxation, is only limited by the necessities
of the State, and of the amount of property upon which it operates.

A citizen of a state may
become the owner of a home through arduous toil and life-long rigid economy,
yet, the state, when invoking the power of levying and collecting taxes, may
sweep away this property, not leaving a vestige for the man whose labor and
privations created a shelter for himself and family.

In a great case before the
highest tribunal of the nation, Justice Samuel P, Miller said that "The
power of taxation is the power to destroy."

No man who is endowed with
a modicum of intelligence would advocate a transfer of this immense power to a
private corporation for its gain.

It would amount to the
self-destruction of a nation.

The power of raising and
maintaining armies is inherent in a sovereign state, and is absolutely
necessary for its self-defense, and therefore its self-preservation.

The strong arm of the Government
can reach every fireside in the land, and can drag from thence the father,
husband, or son, tear him away from the family circle, force him to don the
national uniform, to bear arms, and to lay down his life for his country.

No citizen can resist the
imperative call of his country when involved in war.

No sane man would advocate
the delegation of this high attribute of sovereignty to a corporation for its
individual gain, as such transfer of power would inevitably result in frightful
oppression.

The power of coining,
issuing, and controlling the volume of money is a far more important function
of government than the foregoing.

All commerce, exchange, the
existence of Government, of civilization itself, hinges upon this mighty function
of Government. The power of issuing and controlling money exercises an imperial
sway over all productive industry as universal as the law of gravitation upon
all matter.

The value of all property,
whether of the present time, or of that resulting from the earnings and
accumulations of all past generations, depends upon the control of the volume
of money,

The power of levying and
collecting taxes for the support of the nation, of raising
and maintaining armies for its preservation, is dependent upon the control of
the currency.

The former is subordinate
to the last named power, and consequently involves the very life of the nation.

Yet, in time of the
greatest need of the nation, when everything most valuable to man was at stake,
this necessary power of Government was delegated to the most traitorous and
rapacious system of corporations that ever cursed the people.

By this transfer of
sovereign power to the national banking system, the Federal Government divested
itself of that never failing resource which secured the independence of the
colonies, and which successfully enabled the administration of James Madison to
chastise the overweening pride of Great Britain in 1812.

The alienation of this
highest function of the nation to the national banking money power was a high
crime against the welfare of the country, and it created a powerful moneyed
interest antagonistic to the United States.

More than one hundred years
ago, the illustrious Jefferson clearly pointed out the dangers of banks of issue. Time and
again, he exerted his voice, his pen, and his influence, in warning the people
of the consequences that would inevitably flow from such selfish schemes as the
transfer of national powers to corporations.

The extreme danger of a
sovereign power, in transferring its absolute right of coining and issuing
money in whole, or in part, to a private individual, or corporation, has been
clearly pointed out by the ablest thinkers of all ages. Such transfers of the
powers of a state have universally resulted in extortion and oppression by
those to whom this privilege is granted.